AOL considers Yahoo! deal after potentially ditching dial-up

AOL is apparently considering splitting up its dial-up internet arm and display advertizing business, in an attempt to reduce its reliance moving forward on the legacy connection income. According to Reuters, AOL is hoping to spin off the dial-up business and seek a merger with Yahoo!, though their sources say that an approach to the search engine is yet to have been made.

The rumors echo plans back in 2009 to sell off the dial-up business to either EarthLink or United Online, but it's unclear whether either is now in a position to pick up the tab. AOL still has 4m dial-up customers, who together add around $1bn of revenue to analysts' $2.4bn 2010 estimates for the company. They're also a significant source of traffic to the AOL homepage.

Still, the numbers are shrinking, and analysts agree that AOL needs to take steps if they're not to stagnate and then decline. A Yahoo! deal could pair the site's popular sports, finance, general news and email services with AOL's strengths in maps and entertainment news.